Dollar Tree (DLTR): Short-term forecasts for discount retailers

Dollar Tree Inc. stock (Nasdaq: DLTR) fell more than 1% on Tuesday. The stock has fallen 5% over the past month. The company delivered revenue and profit growth in the fourth quarter of 2022, with comparable store sales growth. Near-term expectations for discount retailers include:


Dollar Tree consolidated net sales for the fourth quarter of 2022 were $7.72 billion, an increase of 9% compared with the same period last year. Net sales of the banner of the same name were up 8% to $4.3 billion, while sales of the Family Dollar banner were up 10% to $3.4 billion. quarter.

Dollar Tree forecasts first quarter 2023 net sales of $7.2 billion to $7.4 billion. Full-year 2023 consolidated net sales are expected to be $29.9 billion to $30.5 billion.

Existing store sales

Corporate same-store sales rose 7.4% in Q4. Dollar Tree Banner’s same-store sales increased his 8.7%. This was due to a 10% increase in average tickets, partially offset by a 1% decrease in traffic. Family Dollar same-store sales increased 5.8% on average ticket growth of 5.3% and traffic growth of 0.5%.

For the first quarter of 2023, the company expects mid-single-digit corporate same-store sales growth, mid-single-digit comp growth on Dollar Tree banners, and mid-single-digit comp growth on Family Dollar banners. doing.

For full-year 2023, discount retailers are expected to deliver low-to-mid-single-digit comparable store sales growth, with high-single-digit growth in the Dollar Tree segment and mid-single-digit growth in Family Dollar I expect. segment.

profit and margin

In Q4 2022, Dollar Tree’s EPS was $2.04, up 1.5% year-over-year. Gross margin improved 70 basis points to 30.9%, while operating margin decreased 20 basis points to 8%.

The company expects first-quarter 2023 EPS to be between $1.46 and $1.56. For the full year, EPS is estimated at $6.30 to $6.80. Dollar Tree expects gross and operating margins to decline in the first half of 2023 and recover in the second half.

To read the full text of Dollar Tree’s Fourth Quarter 2022 Earnings Conference Call, click here

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